Canada and EU Prepare Response to Potential US Metal Tariffs

The European Union (EU) and Canada have announced their readiness to implement countermeasures following the United States' potential imposition of tariffs on steel and aluminum. This decision comes in response to concerns over trade policies and the impact of tariffs on their economies. During a visit to Paris, Canadian Prime Minister Justin Trudeau labeled the tariffs "unacceptable." Similarly, European Commission President Ursula von der Leyen affirmed that the bloc of 27 nations would respond with "firm and proportionate countermeasures." The potential tariffs on metals have raised concerns about the disruption of trade relations and the potential harm to businesses and consumers. Over the last decade, EU exports of steel to the U.S. have averaged around 3 billion euros (3.1 billion dollars) annually. Von der Leyen emphasized that unwarranted tariffs on the EU are not acceptable and would undermine fair and reciprocal trade. The EU has stated it will act to defend its interests in response to these measures. One option for the EU would be to reactivate tariffs imposed in 2018, which targeted U.S. goods in response to similar measures. This decision would be made jointly by Von der Leyen and U.S. President Joe Biden. Currently, EU tariffs on American products such as bourbon, motorcycles, and orange juice are set to expire by the end of March. The American Chamber of Commerce to the EU (AmCham EU), representing American companies operating in Europe, has voiced concerns that the tariffs undermine jobs, prosperity, and transatlantic security. "It should not only be the upstream sectors of steel and aluminum that are affected, but all companies that rely on these materials along the value chains," they stated. Trump's latest trade move has led to record high gold prices in overnight trading, with spot gold rising 0.1% to $2,904.59 in Wednesday's European trading session. Imports of steel account for about 23% of U.S. consumption in 2023, according to the American Iron and Steel Institute, with Canada, Brazil, and Mexico being the largest suppliers. Canada, with its abundant hydroelectric resources supporting metal production, accounts for nearly 80% of primary aluminum imports into the U.S. in 2024. In Paris, Prime Minister Trudeau stated that Canada aims to support constructive engagement on American tariffs and, if necessary, will respond firmly. He added that Trump will impose new North American standards, keeping steel "open and flowing" and aluminum "open and flowing" within the region, while restricting imports into the U.S. of minimally processed Chinese and Russian metals that circumvent other tariffs. Despite China accounting for a small amount of steel to the U.S., it is accused of using subsidized production to cause other countries to export more and lead to circumvention of Chinese steel through other countries into the U.S., to evade tariffs and other trade restrictions.